Selloff in 30-Yr U.S. Treasury Pressures USD Upward, Bearish for Commodities

For this weeks edition of the SIA Equity Leaders Weekly, we are going to circle back on the CBOE 30 Year Interest Rate as it continues to show Yields on the rise. In addition we will take a look at the U.S. Dollar Index and see how it is doing in a rising long end of the curve, U.S. Interest Rate environment.
CBOE Interest Rate 30 Year (TYX.I)
The first chart we are going to tackle this week is the CBOE 30 Year Interest Rate. This is a chart we have been watching closely and have wrote about on many occasions recently as we continue to see upward movement in the yield.
Looking to the chart we can see that near term resistance is at hand after a brief pull back in February. The 3.272% level should not be considered as strong resistance as it comes on the heels of this pullback and a double top signal. The next major level of resistance come in the 3.508% range.
The recent movement and continued upward action continues to put pressure on investors on the long end of the U.S. Treasury curve. For those investors they should keep a close eye on these holdings and look to stronger relative strength fixed income products as alternatives.

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U.S. Dollar Continuous Contract (DX2.F)
We wrote only a couple of weeks ago on the U.S. Dollar Index. The chart has moved through resistance at the 82.34 level since then but more importantly has seen a change from a Negative SMAX of 4 to Positive SMAX of 6 out of 10. This relative outperformance falls in line with what we have seen above as the long end of the U.S. Treasury continues to sell off, increasing Yields. This is the opposite of what has happened since the early 2000′s when we saw yields decline and the U.S. Dollar fall.
Looking to the chart we can also see that the U.S. Dollar has been on a positive trend since January of 2012, reversing a 10 year downtrend. Since then we have seen a confirmation move in June of 2012 and if the 84.83 level is taken out this trend has room to move to the 90.05 range.
Again the importance of these two trends is they are likely to have a significant impact on the Commodity markets, and those investments that have prospered over the past decade.
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